The Slovenia Times

Labour minister announces 1.8% minimum wage rise

Nekategorizirano


The decision to adjust the wage more than just to inflation, which would have meant 0.5%, comes much to the dismay of Economy Minister Zdravko Počivalšek.

Kopač Mark went into the meeting with the mandate to propose more than the 0.5% increase that had been advocated as a maximum by employers, but stayed well below the 5% promoted by trade unions.

The minister, who can determine the minimum wage for each year after consultations with social partners, explained to the press that inflation was only the minimal criteria in Slovenia for adjusting the lowest wage.

Wage trends, economic growth and employment rate trends can also be taken into account, which was advocated by the unions and would have meant a 5% raise to EUR 830 gross or EUR 630 net. A 0.5% increase would have meant adjustment to inflation alone.

Kopač Mrak explained that she had initially been in favour of a 2.6% increase, but that 1.8% were agreed during talks in the government. The agreed rise corresponds to general wage growth in 2016, while it is lower than the GDP growth.

The decision of the labour, family, social affairs and equal opportunities ministry, has meanwhile been attacked as too hasty by Economic Development and Technology Minister Počivalšek.

He said that that cabinet had not been entirely united on the issue: "Maybe Kopač Morak convinced the coalition partners and the other colleagues in the government, but I was definitely not swayed."

Počivalšek argues that such moves present a peril to the economy, as they cause additional pressure on businesses, slow down employment, increase the risk of undeclared work and precarisation.

Summing up his arguments, the Economy Ministry wrote that government think tank IMAD had assessed in 2014 that the raising of the minimum wage during the crisis had contributed to the loss of 7,000 jobs or even 18,000 in the long-term.

In recent years, the minimum wage rose faster than the average wage and among EU members Slovenia is seventh when it comes to minimum wage increases. Among the member states hit hardest by the crisis, it is first by far, the ministry wrote.

What is more, since January 2016, the bonuses for night shifts, for Sunday and holiday work and work-free days are no longer factored into the minimum wage, which increased labour costs by EUR 30m, the ministry added, arguing "the minimum wage must not be a social policy instrument".

Meanwhile, Jože Smole of the Employers' Association (ZDS) also highlighted after today's ESS session that the economic boom was felt differently by individual sectors of the economy and that the wage rise will mostly hurt those who are still struggling with losses.

The Chamber of Commerce and Industry's (GZS) Tatjana Čerin said that the minimum wage was starting to approach the average wave, which was not motivating.

What is more, the minimum wage already is twice as high as for instance in the comparable Visegrad Group countries and is nominally only 4% below the average wage in the EU even though added value and productivity in Slovenia are only at roughly 70% of European average, Čerin said.

Trade unionist Jakob Počivavšek meanwhile argued the increase was still not enough to keep minimum wage recipients above the poverty line. As to the problem of the shrinking difference between the minimum and average wage, he said that wages in general should be higher.

Andreja Poje of the the ZSSS union association added that the time never seemed to be right for raising wages. She does not see how the economy could be hurt by the decision, given that the net profits of companies increased by 126.7% to EUR 1.6bn in 2015.

While the social partners did not discuss today the health care reform as initially announced, the minimum wage was also discussed by the parliamentary Labour, Family and Social Affairs Committee.

The committee rejected the opposition United Left (ZL) proposal to raise the minimum wage twice this year - to EUR 645 net in January and to 700 net in September.

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